March multifamily rents had its best performance since last summer, with average U.S. rents increasing by $4 to $1,371. Despite this, growth dropped 10 basis points year-over-year to 2.5 percent, decelerating from its peak of 5.4 percent growth in early 2016. Major concerns for the industry included peaking supply, declining occupancy rates and affordability, which had led many to speculate if the flattening growth since last summer was a natural pattern or if rents would remain flat for an extended period of time.

Since last July, rents had not moved more than $1 in each direction, as shown by February’s rent performance in last month’s Yardi Matrix survey. Rent growth in the first quarter was weak compared to previous years, with gains averaging 1 percent in the first quarter of each of the last three years. Rents increased by $5 and were up 0.4 percent in the first quarter, marking the smallest increase since 2011.

Metro performance is staying consistent, with Orlando maintaining the number one spot in terms of rental growth, once again at 7 percent. Similar to last month, Sacramento came in second place with a 6.4 percent rent growth, followed by Las Vegas with 5.2 percent, the Inland Empire with 4.4 percent and Phoenix at 4.3 percent. All metros in Matrix’s top 30 has year-over-year rental increases, but occupancy declined in each market except for Houston. Deliveries are expected to hit a peak of 360,000 this year, which will cause occupancy to continue decreasing throughout 2018. With 620,000 units added to the stock over the last two years, occupancy dropped 100 basis points.